TTIP round ends with mixed messages

Negotiators from the European Union and the United States today insisted that talks on a transatlantic trade agreement are making good progress, despite the increasing number of fracture lines that are surfacing.

Their comments came at the end of a fourth round of week-long talks that brought teams of around 100 negotiators on each side together in Brussels.

This was the first round of negotiations since a ‘political stock-taking’ in February, a meeting between the two top trade officials – Karel De Gucht, the European commissioner for trade, and Michael Froman, the US trade representative – to assess progress and identify the principal areas of political difficulty in the talks.

This week’s talks also served as a prelude to the arrival in Brussels on 26 March of US President Barack Obama for a summit with the leaders of the EU’s institutions.

In an effort to focus public attention on the benefits of the transatlantic trade and investment partnership (TTIP), as the prospective deal is dubbed, the leaders of the negotiating teams – Ignacio Garcia Bercero for the EU and Dan Mullaney for the US – both stressed the value of an agreement for small and medium-sized enterprises (SMEs).

Mullaney said that SMEs that trade internationally grow faster, pay better and create more jobs than companies limited to their domestic market.

Garcia Bercero said that the chapter in the trade talks on SMEs was “a first for the European Union” and argued that “TTIP would help them expand”.

Their argument, expanded upon in a document published today on the deal’s potential benefits for small businesses, contends – among other arguments – that smaller companies are disproportionately hurt by non-tariff barriers and could benefit disproportionately from lower costs, more transparency, and less red tape at borders.

The document is one element of the two sides’ public diplomacy to promote acceptance of the talks. Another element, this week, included a two-hour meeting with 300 representatives of business, consumers, and other ‘stakeholders’.

However, the two sides are now showing a less united front on other issues. After last month’s stock-taking, De Gucht said that the US had been notably less ambitious than the EU in the first exchange of offers, on tariffs.

Tariffs are a relatively minor part of the deal, accounting for about 20% of TTIP’s projected value, but cover a range of areas that have historically proved difficult in transatlantic trade relations, including agriculture.

On Wednesday (12 March), a senior US official raised doubts about the EU’s willingness to “stand by our agreed goal of complete tariff elimination”, insisting that the US would.

Yesterday (13 March), a joint document of the declaration being prepared for Obama’s visit emerged, in which both sides committed themselves to removing all tariffs on bilateral trade.

Officials say that the EU offered to remove tariffs in 96% of areas, compared with 88% in the US’s case.

On all negotiating metrics about tariffs – the number of areas where tariffs would be removed immediately, after three years or after seven years or left as ‘undefined’ (the hardest category) – the US was less ambitious than the EU, an EU official said.

Mullaney said today (14 March) that focus of the US is “on the end-point”, rather than showing the same level of ambition as the EU in intermediate phases.

The EU now no longer talks, as it did in the early phases of the TTIP negotiations, about the possibility of an agreement being reached in 2014.

The spat over ambition in this lesser area of concern comes against a backdrop of difficulties in other areas.

Both sides began the talks last July with issues that were de facto off-limits. The EU ruled out discussion about Europe’s audiovisual services in the early phases of talks, while it has been generally understood that the US would not ease limitations on foreign shippers providing services between US ports.

Since then, for the EU, one of the most controversial issues has been the US’s desire to strengthen companies’ position in legal disputes with states, through an investor-state dispute-settlement provisions. The EU has put negotiations on ice until after a three-month public consultation process due to begin shortly.

The European Parliament has also made clear that it is concerned about how private data collected by businesses would be protected by the agreement.

For its part, the US continues to resist EU pressure to include financial services fully in the deal, and has yet to indicate whether it will be willing to give the EU greater legal guarantees of access to US energy.

This week’s round saw talks both about how to open up each markets and on regulation.

There was, though, no further exchange of offers. It remains unclear when the two sides will tell each other how they are prepared to open up their markets for services and for public contracts.